Ethereum DevCon1: Expert View of the Fourth Day

Day four of Ethereum Devcon1 consisted of a showcase of the many different DApps that are being developed.

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Aron van Ammers, Chief Technology Officer and Founder of BlockStars.io, continues his coverage of Ethereum Devcon1 with his recap of Day 4.

Theme: DApps

Day four of Ethereum Devcon1 consisted of a showcase of the many different DApps that are being developed.

Prediction markets

A prediction market makes it possible to bet on the outcome of events. These could be the obvious sports events, but also political decisions or even the planning of a construction project. The concept of prediction markets has been researched for many years before the introduction of blockchains, and it turns out they can lead to very accurate predictions of events, more so than when participants don't have a financial stake in their position.

An obstacle that prevented prediction markets from taking off in the past was that a central party was needed to judge the outcome of the event. For example, a human would need to register that the Democratic or Republican candidate won the USA presidential election, so the bets can be paid out. This is sensitive to errors and fraud, particularly if the central party is also betting themselves.

Decentralized smart contracts on a blockchain have enabled a new interest in prediction markets because they could solve this problem. We saw two prediction market DApps at Devcon1, starting with Augur presented by Jack Peterson. Augur's goal is to create reliable predictions about any event. Their solution is currently based on 26 interacting smart contracts. Augur is hosted on the public Ethereum blockchain, and the DApp is made accessible to global users through an in-browser key management component. End users can choose to use Augur through their own Ethereum node in a fully decentralized manner, or use the browser-based solution as a quick on-ramp.

The second prediction market presentation was from Gnosis. Gnosis has tackled the problem of general access through a web browser in a similar way. Their solution is aimed at delivering a prediction market as a service. Before the start of Devcon1, a live prediction was made on whether Ethereum founder Vitalik Buterin would wear his red hat again. As all of us could verify, and like the odds on this prediction show, indeed he did.

Finally, in a panel on prediction markets the presenters of both DApps discussed the hard problems in prediction markets like dealing with unethical predictions, influencing the predicted event and the influence of artificial intelligence. Furthermore, new ways to deal with prediction markets through different presentations were suggested. For example, what is really a prediction market on the health of a person could be presented to the end user as an innovative type of insurance.

FinTech

In the financial area we were introduced to Maker who have taken on the task of building a stable token within the Ethereum blockchain. The token is pegged to four major world currencies using collateral, leveraging various strategies to incentivize market makers to continuously back the stable value of the token. Having access to a stable "currency" will enable a whole range of possibilities for other DApps.

Phil Barry presented Ujo Music, another spoke of the ConsenSys hub. Ujo aims to solve the complex payment structures in the music industry by rebuilding it on the blockchain. Their live prototype allows for purchasing songs, where the rewards flow to the artists involved immediately and in a fair and fully traceable way. Their solution is not so much focused on fixing the complex web of payment agreements of the existing 30 million songs, but on providing the 70 million songs and 150 million hours of online video expected to be created in the next decade with a better structure.

String, a solution for synthetic assets was presented by Dominic Williams. Synthetic assets are decentralized versions of financial assets like stocks, fiat currencies and precious metals. String is building a DApp to create, exchange and hold these decentralized assets or DAssets. Paying for a coffee with 0.01% of Google stock is one of many options that this would allow for.

Inflekt presented by Ashley Taylor is a decentralized network and events platform. Inflekt connects closely to various other DApps from the ConsenSys hub, with the vision of creating a web of cooperative economies.

As finance gets more and more decentralized, so can its administration. Balanc3 is a smart contract powered Triple-Entry Accounting system. Jeff Scott Ward and Christian Lundkvist explained the concepts of triple-entry accounting and the benefits for guaranteed integrity, accounting and auditing.

Gaming and IoT

Free my Vunk is building a decentralized platform to trade in-game content and progress. In a follow-up panel on gaming on the blockcahin, it became clear that blockchain-based systems can open up a whole range of possibilities for gamers and we'll see a further converging of "real reality" and in-game reality.

Backfeed is a solution for decentralized collaboration and governance containing a reputation system. Matan Field showed several proof of concepts built on Backfeed including Chessmates, a chess game where each of the sides is played by a group of collaborating players, and players get rated for their moves by other players on their side.

A compelling presentation on their internet of things (IoT) was given by Slock.it. Slock.it builds decentralized locks containing a connected Ethereum node that controls it. Beyond the obvious application of unlocking a house securely with a smartphone, having a connected lock that is also an economic actor opens many new possibilities. Some ideas presented were a bike that could be rented for a limited time by paying a sum of money to its lock, and a fully automated 24-hour shop where all goods can be purchased by sending the price of the good to the lock that holds it.

Wrapping up

Today we saw a great range of decentralized apps, balanced between financial and non-financial applications. What all of them had in common is that they could not exist without smart contracts on a blockchain like Ethereum. Some of them wouldn't be possible at all; others might be realized in a centralized manner, but with serious concessions over the decentralized versions that we witnessed today. Tomorrow Devcon1 will focus on the industry and social implications for the final day.